Hiring the right workers to join your startup team is essential for the ultimate success of your business venture. Some entrepreneurs believe that hiring younger workers may yield better results overall, and many will consequently shun older applicants.
There have been many studies confirming that age discrimination in the workplace does exist. The U.S. Bureau of Labor Statistics indicates that 58% of adults believe that age discrimination in the workplace begins when a worker is in his or her 50s.
In comparison with the West, the situation in the Gulf is much more positive. According to Peter Greaves, the head of financial markets at headhunters McArthur Murray in Dubai, “In western markets, people are concerned about age discrimination, particularly if you’re over 40. In the Gulf, a lot of experience is generally viewed as a plus point, so most people include their age. It only becomes an issue if you’re over 60.”
This is also evidenced by visa laws in the United Arab Emirates. The U.A.E. has an age discrimination law in place that states non-nationals must renew their employment visa annually when they reach the age of 60, and that they usually do not qualify for an employment visa after the age of 65.
Approximately 27% of employees who work in firms that are less than five years old in the U.S. are under the age of 34. While the trend in startups may be to hire younger adults, there are a few good reasons why they need to reconsider their approach to staffing.
The benefits of work experience
Many employers value experience when hiring new team members. However, experience typically comes hand-in-hand with age and older workers have substantially more on-the-job experience than their younger colleagues.
Through many decades of on-the-job work experience, older employees have learned what does and does not work. They have those 10,000 hours of practice that, according to Malcolm Gladwell, are needed to master a skill.
By hiring an older and experienced professional, you will not have the inefficiencies associated with trial and error that you may have with a younger worker. Older professionals bring job-related wisdom to the table. They also have exceptional skills associated with mentoring and leading younger team members.
Younger entrepreneurs can greatly profit from the expertise of an older professional. When Mark Zuckerberg, now 33 years old, hired Sheryl Sandberg to be the COO of Facebook 10 years ago, she was 15 years older than him. Prior to joining the firm, she was a vice president at Google. Her previous experience and leadership skills in the industry proved to be invaluable for Facebook.
Older employees have stronger work ethic
Entrepreneurs understandably want to hire workers who will be a long-lasting and beneficial addition to the company. Older employees may have exceptional leadership qualities as well as an innate sense of loyalty that makes them a true asset. Many of them can even bring professional networking relationships to the table as an additional benefit.
Older employees will arrive on time, put in a full day’s worth of work with a smile and work without supervision as a team player. According to an article that Vivek Washwa wrote for TechCrunch, “Older workers tend to be more pragmatic and loyal, and to know the importance of being team players. And ego and arrogance usually fade with age. During my tech days, I hired several programmers who were over 50. They were the steadiest performers and stayed with me through the most difficult times.”
Older employees may plan to stay with a company for many long years. This is opposed to younger workers who usually view their first job as a stepping-stone in their career. Millennials are known as the job-hopping generation and, according to Gallup, six out of 10 of them are open to new job opportunities.
Reduced labor costs
Professionals who are at least 35 years old generally have enough experience in their field that they demand a higher salary. According to Professors Greg Linden and Clair Brown at the University of California, an analysis of the Bureau of Labor Statistics and census data related to the semiconductor industry indicated that engineers’ salaries increased dramatically in the workers’ 30s.
However, salary increases slowed substantially in an engineer’s 40s, and when they reached their 50s their salary even started to decline. In fact, for those engineers over the age of 50, the salary was 14 to 17% lower than the salary of their younger colleagues, depending on their level of education.
Because many startups are strapped for cash, their founders may be inclined to hire much younger and less experienced workers who are just starting out in their careers. However, in some industries, hiring those workers who are in their 50s or even retired, could be a great option for a startup.
Many workers who are over the age of 50 may plan to work another 15 or 20 years in some cases. With increased longevity, these are motivated workers who want to accrue more money in a retirement fund and who also want to stay mentally engaged in the workplace.
While they are interested in earning a decent salary, they also may accept less money in exchange for other benefits. For example, they may value the benefit of being able to telecommute from home, gaining new skills on the job or having quality health insurance.
Younger workers may accept less compensation overall because of their lack of experience, but it also may take them much longer to complete a task. When you look at overall efficiency and value for the money, it makes more sense to pay slightly more for a truly experienced and skilled older worker.
Innovation comes with age
There is a general misconception that older workers are not technologically savvy and even that they are technophobic. Silicon Valley especially, and much of the tech industry elsewhere, has created the trend of hiring workers who are mostly in their 20s.
The belief is that these younger workers are more tech-savvy and creative. In fact, the founder of HubSpot, Brian Halligan, stated for the New York Times that he was “trying to build a culture specifically to attract and retain Gen Y’ers.” He elaborated by saying, “In the tech world, gray hair and experience are really overrated.”
Age discrimination in the workforce is unfortunately common, but it is also illegal in the U.S. While this type of general discrimination may be accepted as a type of social norm for this industry, there is a possibility that blatant age discrimination could result in legal challenges for employers who follow this practice. More than that, it may result in companies failing to take advantage of the skills and benefits that older workers bring to the table.
In a 2016 study, the Information Technology & Innovation Foundation analyzed demographics for more than 900 employees in the tech industry in the United States to determine those who had made the biggest contribution. Ages of those surveyed ranged from 18 to 80 but only 5.8% of these great innovators were 30 years old or younger, while their median age was 47.
The study indicated that the most innovative professionals were between 46 and 50 years old. Furthermore, the rate of innovation continued to be elevated until those surveyed were 55 years old. After the age of 65, it started to decline dramatically.
Mentors are key to success
Startups have a reputation for failing, and experience may play a critical role in the failure rate. In a study by CB Insights of 101 startups that failed, primary causes were related to the lack of market knowledge and a poorly designed business model.
Experienced workers may be excellent additions to a startup because they have the insight and expertise that younger founders may not have. These are workers who can be mentors in different ways, and they may also have valuable networking relationships that can benefit the business.
Matt Arney, the founder of startup TranslateNow, said for NCR Silver: “I’m working closely with a nearly 80-year-old advisor who is helping with our corporate formation and investment strategy. He has had a very successful career and takes pride in helping startups to grow and avoid mistakes he’s seen in his career. His advice has been invaluable and he’s a trusted member of the team.”
Anytime you bring a new team member on board, you must carefully select an applicant based on what you think that he or she can bring to the table. You could make assumptions about innovation and knowledge by hiring a younger and inexperienced employee, or you could hire an older professional with a lengthy track record of delivering results.
Diversity is essential for any startup. However, just as you should not hire an applicant simply because they are older, you also should not hire someone simply because they are young. It is best to look at what each applicant can bring to the table, and how efficient and loyal they will be as you work hard to grow your startup.